|From: Glenn Petersen||3/24/2022 11:47:23 AM|
|Uber stock jumps on deal to offer New York City taxi rides in app|
PUBLISHED THU, MAR 24 20229:05 AM EDT
UPDATED AN HOUR AGO
-- Uber on Thursday reached a deal to list New York City taxis on its app.
-- As part of the agreement, two taxi-hailing apps will integrate their software with Uber’s.
-- It marks a significant reversal for Uber, which has faced opposition from taxi companies since its founding in 2009.
Uber has reached an agreement to list New York City taxis on its app.
Two taxi-hailing apps, operated by Curb and Creative Mobile Technologies, will integrate their software with Uber, allowing users to book taxi rides in the Uber app, the companies announced Thursday. Uber said it expects to launch the feature later this spring.
News of the deal sent Uber shares up as much as 4% on Thursday.
“This is a real win for drivers – no longer do they have to worry about finding a fare during off peak times or getting a street hail back to Manhattan when in the outerboroughs,” said Guy Peterson, Uber’s director of business development, in a statement. “And this is a real win for riders who will now have access to thousands of yellow taxis in the Uber app.”
The agreement marks a sizable shift for Uber, which has faced opposition from traditional taxi services since its founding in 2009.
It also comes as Uber, Lyft and other ride-hailing companies grapple with a shortage of drivers. After a dramatic decline in traveling due to the coronavirus pandemic, ride-hailing companies have struggled to bring drivers back to full speed, which has made rides more expensive.
Uber CEO Dara Khosrowshahi teased last month plans to bring more taxis onto the Uber app, beyond New York City.
“I will tell you we wanna get every single taxi in the world onto our platform by 2025,” Khosrowshahi said in an interview with CNBC’s Andrew Ross Sorkin.
Taxis are already available in the Uber app in other countries, including Spain, Germany and South Korea.
Uber stock jumps on deal to offer New York City taxi rides in app (cnbc.com)
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||4/6/2022 7:03:07 AM|
|Uber looks to create travel ‘superapp’ by adding planes, trains and rental cars|
PUBLISHED WED, APR 6 20226:43 AM EDT
Sam Shead @SAM_L_SHEAD
-- The San Francisco-headquartered firm announced Wednesday that it is adding trains, buses, planes and car rentals to its U.K. app this year.
-- Jamie Heywood, Uber’s boss in the U.K., said in a statement that Uber hopes to become “a one-stop-shop for all your travel needs.
-- ”Uber will not provide these travel services itself but it will allow users to book them through its app following software integrations with airlines, bus and rail operators, and car rental companies.
Uber is driving ahead with its plan to become a travel “superapp”.
The San Francisco-headquartered firm announced Wednesday that it is adding trains, buses, planes and car rentals to its U.K. app this year. The move is part of a pilot that could be expanded to other countries at a later date if it goes well.
While Uber won’t provide these travel services itself, it will allow users to book them through its app following software integrations with airlines, inter-city bus and rail operators, and car rental companies.
The tech giant, which may take a cut on each booking, said it plans to announce various partners in the coming months.
Uber said the integrations will help to boost app usage among its users in the U.K, who also have the choice of using apps like Bolt and Free Now. The U.K. is one of Uber’s largest markets outside the U.S.
Jamie Heywood, Uber’s boss in the U.K., said in a statement that Uber hopes to become “a one-stop-shop for all your travel needs.”
“You have been able to book rides, bikes, boat services and scooters on the Uber app for a number of years, so adding trains and coaches is a natural progression,” he said.
He added: “Later this year we plan to incorporate flights, and in the future hotels, by integrating leading partners into the Uber app to create a seamless door-to-door travel experience.”
Uber also plans to let people buy Eurostar train tickets through the app. Eurostar allows travelers to commute from London to Paris and other cities via the Channel Tunnel.
The announcement comes after a recent win for Uber.
On March 26, Uber secured a 30-month license to continue operating in London, ending a protracted battle with city regulators over whether the ride-hailing app was “fit and proper.”
But the company is behind schedule on its “superapp” plans.
In 2018, Uber CEO Dara Khosrowshahi said he wanted to add more transport options to the app.
“It’s fair to say that Covid made it a little bit hard for us to progress as quickly as we would like,” Heywood reportedly told The Financial Times.
In premarket trading Wednesday, Uber’s share price was down 1.6% to $34.40 at 6:40 a.m. ET.
Uber chases 'superapp' by adding planes, trains and rental cars (cnbc.com)
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||5/2/2022 1:11:16 PM|
|Uber reports Q1 earnings on Wednesday: Here’s what Wall Street’s watching|
PUBLISHED MON, MAY 2 202211:19 AM EDT
Jessica Bursztynsky @JBURSZ
-- Uber is set to report first-quarter earnings after the bell on Wednesday.
-- The latest financials come after what’s appeared to be a challenging quarter for the company.
-- Shares are down more than 26% year-to-date as inflation challenged consumers, the omicron coronavirus variant spread and surging gas prices weighed on the stock.
Uber will report first-quarter earnings after the bell on Wednesday and Wall Street notes to investors are providing insight into what investors might expect.
The latest financials come after what’s appeared to be a challenging quarter for the company. Shares are down more than 26% year-to-date as inflation challenged consumers, the omicron coronavirus variant spread and surging gas prices weighed on the stock.
Here’s what Wall Street is watching for this quarter:
Are Uber riders coming back?
Uber has likely rebounded from any omicron rider lows. In a March filing with the SEC, Uber said mobility demand significantly improved through the month of February. Trips were 90% recovered from Feb. 2019 levels. That led the company to raise its first-quarter EBITDA guide by $25 million at the mid-point to $130 million-$150 million from $100 million-$130 million.
“Contrary to most other sub-sectors of Internet, rideshare Q1 results should be solid on the back of resilient mobility trends,” Alliance Bernstein analysts said in an earnings preview. Investors will be watching for regional recovery trends, since APAC growth has likely lagged from an uptick in Covid. Its European market could also see an outsized impact from the war and inflation, the analysts said.
How have fuel prices impacted drivers?
As gas prices shot up across the nation due to the war in Ukraine, many feared drivers would flee gig work in favor of other jobs. Some delivery and rideshare companies struggled with supply and demand imbalances from the pandemic, so further strain or a setback could’ve hampered financials.
For its part, Uber implemented a temporary fuel surcharge. That’s set to expire soon, so investors will be looking for color on if that kept drivers and if the company plans to extend the incentive. Gas prices were averaging $4.19 a gallon on Monday, compared to $2.9 a year ago, according to data from AAA.
Still, a bulk of drivers believe that the surcharge wasn’t enough and some analysts say the recovery in driver supply has slowed. “We think driver supply and take rate risk is elevated, with our proprietary price tracking data indicating that ride prices and wait times were up in April vs 1Q,” Bank of America analysts said in a note.
Will Uber have to increase incentives?
As mobility grows, Uber may need to implement additional near-term driver incentives because of high gas prices and a need to rebalance supply and demand.
The company spent millions last year in an effort to bring back drivers as states eased Covid restrictions and vaccinations were widely available. But those incentives weigh on its balance sheet, and investors have consistently been concerned about expensive efforts to bring back drivers.
“For 2Q, risk is that Uber may need to add to near-term driver incentives to adjust for positive demand recovery and gas prices,” the Bank of America analysts wrote. Still, the incentives may not be as costly as in 2021, the Alliance Bernstein analysts speculated.
How far can delivery go?
Uber’s delivery business had allowed the company to withstand Covid headwinds when people began ordering more at home during the pandemic. In recent quarters, it appeared that the segment, which includes its Uber Eats business, has continued to hold up as food delivery becomes a part of regular life.
But how long can delivery grow? “Following a slew of estimate cuts across the cohort of pandemic winners, the looming concern is that food delivery will miss the mark in Q1,” Alliance Bernstein analysts said.
Uber said in the March filing that delivery annualized run rate gross bookings reached an all-time high in February, which means it may need to look elsewhere to grow.
“New customer adds are likely slowing, but we believe order frequency can still be a driver of growth,” the analysts said.
Uber Q1 earnings hit on Wednesday: Here's what analysts are watching (cnbc.com)
|RecommendKeepReplyMark as Last ReadRead Replies (2)|
|To: Glenn Petersen who wrote (224)||5/4/2022 7:10:00 AM|
|From: Glenn Petersen|
|Lyft shares plunge on light guidance, continued driver incentives|
PUBLISHED TUE, MAY 3 20225:29 PM EDT
UPDATED TUE, MAY 3 20226:46 PM EDT
Jessica Bursztynsky @JBURSZ
-- Lyft reported first-quarter 2022 earnings on Tuesday.
-- Shares plunged on light guidance and continued driver incentives.
Shares of Lyft lost more than a quarter of their value in after-hours trading Tuesday after the company provided light second-quarter guidance and warned investors it will have to keep spending on driver incentives.
Here are the key numbers:
Earnings per share: 7 cents adj. vs loss of 7 cents expected in a Refinitiv survey of analysts
Revenue: $876 million vs $846 million expected by Refinitiv
Active riders: 17.8 million vs 17.9 million expected, per FactSet
Revenue per active rider: $49.18 vs $47.07 expected, according to StreetAccount
For the second quarter, Lyft said it expects revenue between $950 million and $1 billion. Wall Street was estimating $1.02 billion, per StreetAccount.
The stock fell 27% to $22.50 in extended trading. Should it open there on Wednesday, it will be the lowest stock price for Lyft since October 2020. Larger rival Uber, which reports quarterly earnings on Wednesday, also plunged on Lyft’s results, dropping more than 9% after markets closed.
Lyft reported a net loss for the quarter of $196.9 million versus a net loss of $427.3 million in the same period of 2021. The company said its loss included $163.2 million of stock-based compensation and related payroll tax expenses.
The ride-hailing company reported 17.8 million active riders, narrowly missing estimates. It’s also a decline from the fourth quarter when Lyft said it had 18.73 million active riders.
Lyft heavily invested in driver incentives during the Covid pandemic and recovery, which has weighed on financials. The supply of drivers had seemed to stabilize but as gas prices shot up across the nation due to the war in Ukraine earlier this year, some investors feared drivers would leave their respective platforms and companies would have to increase their incentives.
Lyft said during its analyst call it will be investing more in driver subsidies in the coming quarter, though it believes that will help “pay off in a healthier marketplace.” It’s unclear how much the company will spend.
Lyft earnings Q1 2022 (cnbc.com)
|RecommendKeepReplyMark as Last Read|
|To: Glenn Petersen who wrote (224)||5/4/2022 7:52:24 AM|
|From: Glenn Petersen|
|Uber reports surging revenue as drivers return, but posts massive loss on investments|
PUBLISHED WED, MAY 4 20227:04 AM EDT
UPDATED MOMENTS AGO
Jessica Bursztynsky @JBURSZ
-- Uber on Wednesday reported surging revenue during the first quarter as the rideshare company recovers from its coronavirus lows.
-- Mobility revenues have finally surpassed delivery revenues.
-- The company reported a net loss of $5.9 billion for the first quarter, which it said was primarily due to its equity investments in Grab, Aurora and Didi.
Uber on Wednesday reported surging revenue during the first quarter as the rideshare company said it’s recovering from its coronavirus lows and wouldn’t have to put up “significant” investments to keep drivers on the platform.
The company appears to be on track to surpass pre-pandemic levels as travel accelerates. CEO Dara Khosrowshahi said in a statement that April mobility gross bookings exceeded 2019 levels across all regions and use cases.
Uber also reported a massive loss due to its investments during the period. Shares seesawed in premarket trading after the report.
Here are the key numbers:
Loss per share: $3.04 (GAAP), not comparable to analyst estimates
Revenue: $6.85 billion vs. $6.13 billion estimated, according to a Refinitiv survey of analysts.
For the second quarter, Uber anticipates gross bookings of between $28.5 billion and $29.5 billion. In addition, it expects adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, of between $240 million and $270 million.
Uber said it expects to generate “meaningful positive cash flows” for the full year 2022.
The company reported a net loss of $5.9 billion for the first quarter, which it said was primarily due to its equity investments in Southeast Asian mobility and delivery company Grab, autonomous vehicle start-up Aurora and Chinese ride-hailing giant Didi. Uber CFO Nelson Chai said in prepared remarks the company has the liquidity to maintain its positions and wait for a better time to sell.
Its adjusted EBITDA was $168 million. That’s up $527 million from the same quarter a year ago.
Uber’s revenue was up 136% year over year to $6.9 billion.
Here’s how Uber’s largest business segments performed in the first quarter of 2022:
Mobility (gross bookings): $10.7 billion, up 58% year over year
Delivery (gross bookings): $13.9 billion, up 12% year over year
Uber was reliant on its delivery business, which includes Uber Eats, throughout the pandemic. However, mobility revenues have finally surpassed delivery revenues. Its mobility segment reported $2.52 billion in revenue, compared with delivery’s $2.51 billion. Revenue strips out additional taxes, tolls and fees from gross bookings.
Uber reported 1.71 billion trips on the platform during the quarter, which is up 18% from the same quarter a year ago. Monthly active platform consumers reached 115 million, up 17% year over year. Drivers and couriers earned an aggregate $9 billion in the quarter, which is slightly less than the fourth quarter.
Uber said its driver base is at a post-pandemic high. The company expects that to continue without “significant incremental incentive investments,” Khosrowshahi said in prepared remarks.
Rideshare companies have struggled with supply and demand since the Covid-19 pandemic lead drivers off the road. Companies, including Uber, had to heavily rely on driver incentives to bring drivers back, which ate into its financials.
That seemed to be stabilizing in recent months, but the war in Ukraine caused significant hikes in fuel prices. Analysts feared companies would have to pour millions into keeping drivers around. Uber is likely to add more color on driver incentives during its earnings call that is scheduled for 8 a.m. ET.
Driver incentives, along with light guidance, caused shares of rival Lyft to plunge in extended trading Tuesday. Lyft said during its analyst call it will be investing more in driver subsidies in the coming quarter, though it believes that will help “pay off in a healthier marketplace.”
Read Uber’s earnings release here.
Uber Q1 2022 earnings (cnbc.com)
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||5/5/2022 7:53:07 AM|
|Uber Reads the Road in Ride-Hailing|
Lyft’s results show it will pay for its defensive driving against Uber
By Laura Forman
Wall Street Journal
May 4, 2022 7:19 am ET
Unlike its rival Uber, UBER -4.65% Lyft’s LYFT -29.91% crash has arrived in Hemingway fashion: Gradually, then suddenly.
Both ride-hailers’ shares were down around 46% over the last year heading into their first-quarter earnings reports, weighed down by a broader tech selloff as ride-hailing recovery seemed to chug along at a much slower pace than many investors had hoped.
But the wheels fell off for Lyft Tuesday. Its shares lost over a quarter of their value in after-hours trading following an earnings report that showed active riders falling on a sequential basis, ride-hailing demand still far from recovered in some major cities and further investments in driver supply needed.
Added investments, including in driver supply, led to a second-quarter outlook for adjusted earnings before interest, taxes, depreciation and amortization of just $10 million to $20 million—more than $60 million below what Wall Street was expecting at the midpoint. In a market that has recently swung from valuing growth at all costs to valuing profits, a weaker-than-expected bottom line was particularly alarming. If Tuesday’s after-hours reaction holds in Wednesday trading, it will represent its worst single-day trading loss on record.
Lyft’s commentary was so bad, Uber Technologies moved up its earnings release and conference call after watching its own shares trade off sharply in sympathy. In a report that was previously scheduled for Wednesday after the market’s closed, Uber raced to reassure its investors Wednesday morning it wouldn’t need significant incremental incentive investments to keep its own driver supply healthy. And while Lyft said its ride-share volume was still only around 70% recovered versus fourth quarter 2019 levels, Uber said trips for its mobility business were “approaching full recovery” versus 2019, while its mobility gross bookings had already outpaced prepandemic levels.
Citing recent trends, Uber also said it expected its mobility arm to deliver better than seasonal growth in the second quarter with total company adjusted Ebitda slightly higher than Wall Street’s forecast at the midpoint of its outlook.
Uber Chief Executive Officer Dara Khosrowshahi said Wednesday his company is “keenly aware” of the high value the markets are placing on companies generating and growing profits, noting its platform advantages, among other things, could drive competitive advantages and durable growth.
There are two key reasons Uber might be finding itself in a better position regarding driver supply right now. The first is that Uber’s multiple verticals are more appealing to drivers. Uber said Wednesday its multi-product platform strategy is differentiated from competition not only for consumers but also for drivers, “who can drive, deliver, or shop,” all within one app.
More likely, though, Uber simply paid more last year to make it more appealing. Recall last year, Lyft said its investments to boost driver supply would create a first-quarter revenue headwind of just $10 million to $20 million. Uber, meanwhile, cited a planned $250 million investment over the course of the year, albeit on a much higher revenue base.
As for potential go-forward expenses, it is worth noting that there are also downsides to being the Uber of all things in all places. Uber had an entire segment of its conference-call script dedicated to regulatory “progress,” facing various labor laws globally, some of which do not accept the notion of drivers as independent contractors as has been allowed for gig companies in the U.S. In addition to the financial risk that reclassification poses, the legal and campaign fees in the U.S. alone have hardly been inconsequential.
In the race toward sustainable profits, this week’s results could be an isolated turbo boost for Uber that stalls as the year evolves; or it could finally be the beginnings of the longer-term validation Uber has been seeking all along.
Perhaps Lyft just hasn’t been hungry enough.
Write to Laura Forman at firstname.lastname@example.org
Uber Reads the Road in Ride-Hailing - WSJ
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||5/9/2022 5:43:32 AM|
|UBER tightens its belt.|
Uber CEO tells staff company will cut down on costs, treat hiring as a ‘privilege’
PUBLISHED MON, MAY 9 20223:18 AM EDT
UPDATED 2 HOURS AGO
Deirdre Bosa @DEE_BOSA
Ryan Browne @RYAN_BROWNE_
-- Uber will slash spending on marketing and incentives and treat hiring as a “privilege,” CEO Dara Khosrowshahi said in an email to staff on Sunday.
-- “It’s clear that the market is experiencing a seismic shift and we need to react accordingly,” Khosrowshahi said.
-- Uber will now focus on achieving profitability on a free cash flow basis rather than adjusted EBITDA, he added.
Uber will cut back on spending and focus on becoming a leaner business to address a “seismic shift” in investor sentiment, CEO Dara Khosrowshahi told employees in an email obtained by CNBC.
“After earnings, I spent several days meeting investors in New York and Boston,” Khosrowshahi said in the email, which was sent out late Sunday. “It’s clear that the market is experiencing a seismic shift and we need to react accordingly.”
Tech stocks have plunged sharply from the highs of the coronavirus pandemic, as investors fret over the prospect of an end to the era of cheap money that defined a historic bull market. The Nasdaq Composite recorded its fifth consecutive week of declines last week, its longest weekly losing streak since 2012.
To address the shift in economic sentiment, Uber will slash spending on marketing and incentives and treat hiring as a “privilege,” Khosrowshahi said.
“We have to make sure our unit economics work before we go big,” the Uber boss wrote. “The least efficient marketing and incentive spend will be pulled back.”
“We will treat hiring as a privilege and be deliberate about when and where we add headcount. We will be even more hardcore about costs across the board.”
It makes the ride-hailing giant the latest tech company to warn of a slowdown in hiring. Facebook last week told staff it would stop or slow the pace of adding midlevel or senior roles, while Robinhood is cutting about 9% of its workforce.
Uber will now focus on achieving profitability on a free cash flow basis rather than adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), Khosrowshahi said.
“We have made a ton of progress in terms of profitability, setting a target for $5 billion in Adjusted EBITDA in 2024, but the goalposts have changed,” Khosrowshahi said. “Now it’s about free cash flow. We can (and should) get there fast.”
Uber’s revenues more than doubled to $6.9 billion in the first quarter, as demand for its rides business rebounded thanks to a relaxing of Covid restrictions. The company has relied heavily on its Eat food delivery unit to boost sales in the pandemic.
Still, Uber also posted a $5.9 billion loss in the period, citing a slump in its equity investments.
“We are serving multi-trillion dollar markets, but market size is irrelevant if it doesn’t translate into profit,” he said.
Though investors are “happy” with the growth of Uber Eats coming out of the pandemic, the segment “should be growing even faster,” Khosrowshahi said. He added the company’s freight business is a growth opportunity that “needs to get even bigger.”
He ended the note with a rallying call to staff: “let’s make it legendary. GO GET IT!”
Read the full letter below:
Team Uber --
After earnings, I spent several days meeting investors in New York and Boston. It’s clear that the market is experiencing a seismic shift and we need to react accordingly. My meetings were super clarifying and I wanted to share some thoughts with all of you. As you read them, please bear in mind that while investors don’t run the company, they do own the company—and they’ve entrusted us with running it well. We get to set the strategy and make the decisions, but we need to do so in a way that ultimately serves our shareholders and their long term interests.
1. In times of uncertainty, investors look for safety. They recognize that we are the scaled leader in our categories, but they don’t know how much that’s worth. Channeling Jerry Maguire, we need to show them the money. We have made a ton of progress in terms of profitability, setting a target for $5 billion in Adjusted EBITDA in 2024, but the goalposts have changed. Now it’s about free cash flow. We can (and should) get there fast. There will be companies that put their heads in the sand and are slow to pivot. The tough truth is that many of them will not survive. The average employee at Uber is barely over 30, which means you’ve spent your career in a long and unprecedented bull run. This next period will be different, and it will require a different approach. Rest assured, we are not going to put our heads in the sand. We will meet the moment.
2. Investors finally understand that we are a completely different animal than Lyft and other ridesharing-only platforms. They are incredibly excited about the pace of our innovation, how quickly we are rebounding, and huge growth opportunities like Hailables and Taxi. While they acknowledge that we are winning, they don’t yet know the “size of the prize.” Their questions run the gamut from, “Has anyone other than you made money in on-demand transport?” to “Ridesharing has been around for awhile, why isn’t anyone else profitable?” They see how big the TAM is, they just don’t understand how that translates into significant profits and free cash flow. We have to show them.
3. Investors are happy with Delivery’s growth coming out of the pandemic and see that we have performed better than many other pandemic winners. I must admit that was a bit of a surprise for me because I firmly believe Delivery should be growing even faster. The primary questions were: “Is Delivery a good business and why?” and “What happens if we enter a recession?” We need to answer both of these questions with undeniably strong results.
4. Investors who asked about Freight love Freight. However, less than 10% of them asked about it. Freight needs to get even bigger so that investors recognize its value and love it as much as I do.
5. Meeting the moment means making trade-offs. The hurdle rate for our investments has gotten higher, and that means that some initiatives that require substantial capital will be slowed. We have to make sure our unit economics work before we go big. The least efficient marketing and incentive spend will be pulled back. We will treat hiring as a privilege and be deliberate about when and where we add headcount. We will be even more hardcore about costs across the board.
6. We have started to demonstrate the Power of the Platform, which is a structural advantage that sets us apart. As you know, our strategy here is simple: bring in consumers on either Mobility or Delivery, encourage them to try the other, and tie everything together with a compelling membership program. The advantage here is obvious, but we have to show the value of the platform in real dollar terms. We are serving multi-trillion dollar markets, but market size is irrelevant if it doesn’t translate into profit.
7. We have to do all of the above while continuing to deliver an outstanding and differentiated experience for consumers and earners. Whether someone is booking rides for a summer trip with friends, or a new parent relying on Uber Eats for everything from groceries to dinner and diapers, it’s on us to make every interaction excellent. The same goes for anyone who comes to Uber to earn. We responded to the pandemic by becoming earner-centric in a way we’d never been before. We are innovating for earners, thinking deeply about their experience, and putting ourselves in their shoes—literally—by driving, delivering and shopping ourselves. Because of hundreds of improvements in this area, people who want to earn flexibly are now coming to Uber first, where they benefit from our scale, diversification, and commitment to treating them with respect.
I’ve never been more certain that we will win. But it’s going to demand the best of our DNA: hustle, grit, and category-defining innovation. In some places we’ll have to pull back to sprint ahead. We will absolutely have to do more with less. This will not be easy, but it will be epic. Remember who we are. We are Uber, a once-in-a-generation company that became a verb and changed the world forever. Let’s write the next chapter of our story, working together as #OneUber, and let’s make it legendary.
GO GET IT!
Uber to cut down on costs, treat hiring as a 'privilege': CEO email (cnbc.com)
|RecommendKeepReplyMark as Last Read|
|From: Glenn Petersen||5/27/2022 8:44:21 AM|
|Uber and Lyft’s New Road: Fewer Drivers, Thrifty Riders and Jittery Investors|
The companies are cutting costs, bringing back cheaper rides and looking for new ways to woo drivers
By Preetika Rana
Wall Street Journal
May 27, 2022 7:45 am ET
Uber UBER 4.81%? Technologies Inc. and Lyft Inc. LIFT 6.19%? are recalibrating to a new reality: Investors are increasing the pressure to rein in hefty losses, riders are taking fewer trips as fares rise and drivers are still in short supply.
The average Uber and Lyft fare hit a record high in the U.S. last month, according to market-research firm YipitData, driven by the labor shortage and high gas prices. The companies collectively drew at least 20% fewer riders and posted 35% fewer trips in the first quarter than three years earlier, according to YipitData.
The companies expected the labor shortage to normalize after states phased out pandemic-driven unemployment benefits last year, but demand for drivers continues to outpace supply.
The situation has analysts and investors asking how big the ride-hailing market is and whether Uber and Lyft can operate without losing money.
To combat the stubborn set of challenges, the companies are bringing back ride-pooling—picking up multiple passengers who want to save money by paying only part of the fare. Ride-pooling was suspended during the health crisis.
To deepen its pool of on-demand drivers, Uber has joined forces with its once-sworn enemies, taxis. Lyft said it would hand out bigger bonuses to drivers. Meanwhile, both companies are cutting costs by restricting hiring and spending.
“Our near-term action plan will be focused on accelerating profits—whether we like it or not, that’s the ticket of entry in today’s market,” Lyft President John Zimmer wrote in a Tuesday memo to staff viewed by The Wall Street Journal.
Lyft’s shares have fallen more than 65% in the past year, Uber’s more than 50%, while the Nasdaq Composite Index has slid less than 20%.
To deepen its pool of on-demand drivers, Uber has joined forces with its once-sworn enemies, taxis. PHOTO: ANGELA WEISS/AGENCE FRANCE-PRESSE/GETTY IMAGES
The companies are attempting to find a new balance between pushing for profits and growing their customer base by remaining affordable.
“It’s in our interest to make Uber as widely affordable and available as possible,” Andrew Macdonald, Uber’s global mobility chief, said in an emailed statement.
To get the attention of price-sensitive customers, Lyft this month rolled out its first advertising campaign to promote the use of its rental bikes. Last week Uber launched features meant to make booking rides easier and cheaper. One feature imports hotel and flight reservations from Gmail and makes suggestions on prebooking rides, while another lets individuals cover Uber rides through vouchers for things like weddings.
For years, Uber and Lyft subsidized ride prices. Those discounts saddled the companies with hefty losses but helped them boast of tens of millions of riders.
The companies put more emphasis on striving for profit after going public in 2019, only to be hit by the pandemic. At first, they didn’t have enough riders, then they struggled with a lack of drivers. The driver shortage lasted longer than the companies expected, pushing fares higher last year. Fares then seemed to have plateaued, only for soaring gas prices to drive another surge. The companies imposed new fees on riders to help drivers.
Average U.S. fares reached a new high in April, more than 35% above where they were before Covid-19, according to YipitData.
Both Uber and Lyft expect fares to eventually retreat but have signaled that the focus on turning a profit means they likely won’t return to prepandemic levels.
“The days of ride-share being a cheaper alternative to other modes of transportation are gone,” said Youssef Squali, an analyst for Truist Securities. “The market is probably not as large as we thought two to three years ago.”
Lyft reported around three million fewer riders in the first quarter than three years earlier, a 13% drop. Uber reported at least 20% fewer trips in the U.S. for the quarter, though it said the number of riders in April was near prepandemic levels.
For some once-regular customers, ride-share has now become a luxury.
Uber’s food-delivery arm provides a revenue stream that doesn’t depend on people going out more. PHOTO: JUTHARAT PINYODOONYACHET FOR THE WALL STREET JOURNAL
Sharan Godya, a 31-year-old San Francisco resident, used to use Uber and Lyft several times a week but has cut back and started taking the bus for short trips. “That’s not something I did before,” he said.
The companies point out that their revenue has surpassed prepandemic levels thanks to higher fares, and say they expect both riders and trip volume will eventually bounce back. Uber said its riders and trip volumes have recovered to prepandemic levels overseas, and the U.S. has lagged behind because it was harder hit by the recent Omicron wave.
Both companies are betting that pooled rides will bring back cost-conscious customers. Uber resumed them in Miami in November and plans to expand to 15 other markets later this year. Earlier this month, Lyft resumed pooled rides in San Francisco and some other cities. Mr. Zimmer said in his staff memo this week that it will expand the service to all markets to “Win riders through affordability.”
To boost its driver pool and reduce costs, Uber is working with traditional taxis in some cities. Using established taxis reduces the pressure to spend on bonuses to woo drivers.
Both companies said they can’t pull back too much on bonuses without risking losing drivers, as gig workers have so many other options now.
“I’m not loyal,” said Sergio Avedian, who has driven for seven apps, including Uber and Lyft, and writes about his experience on The RideShare Guy blog for drivers. “Nobody is loyal.”
Write to Preetika Rana at email@example.com
Uber and Lyft’s New Road: Fewer Drivers, Thrifty Riders and Jittery Investors - WSJ
|RecommendKeepReplyMark as Last ReadRead Replies (1)|
|To: Glenn Petersen who wrote (230)||7/10/2022 4:41:49 PM|
|From: Glenn Petersen|
|Uber broke laws, duped police and secretly lobbied governments, leak reveals|
-- More than 124,000 confidential documents leaked to the Guardian
-- Files expose attempts to lobby Joe Biden, Olaf Scholz and George Osborne
-- Emmanuel Macron secretly aided Uber lobbying in France, texts reveal
-- Company used ‘kill switch’ during raids to stop police seeing data
-- Former Uber CEO told executives ‘violence guarantees success’
by Harry Davies, Simon Goodley, Felicity Lawrence, Paul Lewis and Lisa O'Carroll
Sun 10 Jul 2022 12.00 EDT
A leaked trove of confidential files has revealed the inside story of how the tech giant Uber flouted laws, duped police, exploited violence against drivers and secretly lobbied governments during its aggressive global expansion.
The unprecedented leak to the Guardian of more than 124,000 documents – known as the Uber files – lays bare the ethically questionable practices that fuelled the company’s transformation into one of Silicon Valley’s most famous exports.
The leak spans a five-year period when Uber was run by its co-founder Travis Kalanick, who tried to force the cab-hailing service into cities around the world, even if that meant breaching laws and taxi regulations.
During the fierce global backlash, the data shows how Uber tried to shore up support by discreetly courting prime ministers, presidents, billionaires, oligarchs and media barons.
French taxi drivers protesting against private hire services such as Uber. Photograph: Olivier Coret/Rex/Shutterstock
Leaked messages suggest Uber executives were at the same time under no illusions about the company’s law-breaking, with one executive joking they had become “pirates” and another conceding: “We’re just fucking illegal.”
The cache of files, which span 2013 to 2017, includes more than 83,000 emails, iMessages and WhatsApp messages, including often frank and unvarnished communications between Kalanick and his top team of executives.
In one exchange, Kalanick dismissed concerns from other executives that sending Uber drivers to a protest in France put them at risk of violence from angry opponents in the taxi industry. “I think it’s worth it,” he shot back. “Violence guarantee[s] success.”
In a statement, Kalanick’s spokesperson said he “never suggested that Uber should take advantage of violence at the expense of driver safety” and any suggestion he was involved in such activity would be completely false.
The leak also contains texts between Kalanick and Emmanuel Macron, who secretly helped the company in France when he was economy minister, allowing Uber frequent and direct access to him and his staff.
Macron, the French president, appears to have gone to extraordinary lengths to help Uber, even telling the company he had brokered a secret “deal” with its opponents in the French cabinet.
Privately, Uber executives expressed barely disguised disdain for other elected officials who were who were less receptive to the company’s business model.
After the German chancellor, Olaf Scholz, who was mayor of Hamburg at the time, pushed back against Uber lobbyists and insisted on paying drivers a minimum wage, an executive told colleagues he was “a real comedian”.
When the then US vice-president, Joe Biden, a supporter of Uber at the time, was late to a meeting with the company at the World Economic Forum at Davos, Kalanick texted a colleague: “I’ve had my people let him know that every minute late he is, is one less minute he will have with me.”
After meeting Kalanick, Biden appears to have amended his prepared speech at Davos to refer to a CEO whose company would give millions of workers “freedom to work as many hours as they wish, manage their own lives as they wish”.
The Guardian led a global investigation into the leaked Uber files, sharing the data with media organisations around the world via the International Consortium of Investigative Journalists (ICIJ). More than 180 journalists at 40 media outlets including Le Monde, Washington Post and the BBC will in the coming days publish a series of investigative reports about the tech giant.
In a statement responding to the leak, Uber admitted to “mistakes and missteps”, but said it had been transformed since 2017 under the leadership of its current chief executive, Dara Khosrowshahi.
“We have not and will not make excuses for past behaviour that is clearly not in line with our present values,” it said. “Instead, we ask the public to judge us by what we’ve done over the last five years and what we will do in the years to come.”
Kalanick’s spokesperson said Uber’s expansion initiatives were “led by over a hundred leaders in dozens of countries around the world and at all times under the direct oversight and with the full approval of Uber’s robust legal, policy and compliance groups”.
‘Embrace the chaos’
The leaked documents pull back the curtains on the methods Uber used to lay the foundations for its empire. One of the world’s largest work platforms, Uber is now a $43bn (£36bn) company, making approximately 19m journeys a day.
The files cover Uber’s operations across 40 countries during a period in which the company became a global behemoth, bulldozing its cab-hailing service into many of the cities in which it still operates today.
An Uber car in Moscow. Photograph: Fifg/Alamy
From Moscow to Johannesburg, bankrolled with unprecedented venture capital funding, Uber heavily subsidised journeys, seducing drivers and passengers on to the app with incentives and pricing models that would not be sustainable.
Uber undercut established taxi and cab markets and put pressure on governments to rewrite laws to help pave the way for an app-based, gig-economy model of work that has since proliferated across the world.
In a bid to quell the fierce backlash against the company and win changes to taxi and labour laws, Uber planned to spend an extraordinary $90m in 2016 on lobbying and public relations, one document suggests.
Its strategy often involved going over the heads of city mayors and transport authorities and straight to the seat of power.
In addition to meeting Biden at Davos, Uber executives met face-to-face with Macron, the Irish prime minister, Enda Kenny, the Israeli prime minister, Benjamin Netanyahu, and George Osborne, the UK’s chancellor at the time. A note from the meeting portrayed Osborne as a “strong advocate”.
In a statement, Osborne said it was the explicit policy of the government at the time to meet with global tech firms and “persuade them to invest in Britain, and create jobs here”.
While the Davos sitdown with Osborne was declared, the data reveals that six UK Tory cabinet ministers had meetings with Uber that were not disclosed. It is unclear if the meetings should have been declared, exposing confusion around how UK lobbying rules are applied.
Taxis block Whitehall during a protest against a decision to grant Uber a licence to operate in London in 2016. Photograph: Andy Rain/EPA
The documents indicate Uber was adept at finding unofficial routes to power, applying influence through friends or intermediaries, or seeking out encounters with politicians at which aides and officials were not present.
It enlisted the backing of powerful figures in places such as Russia, Italy and Germany by offering them prized financial stakes in the startup and turning them into “strategic investors”.
And in a bid to shape policy debates, it paid prominent academics hundreds of thousands of dollars to produce research that supported the company’s claims about the benefits of its economic model.
Despite a well-financed and dogged lobbying operation, Uber’s efforts had mixed results. In some places Uber succeeded in persuading governments to rewrite laws, with lasting effects. But elsewhere, the company found itself blocked by entrenched taxi industries, outgunned by local cab-hailing rivals or opposed by leftwing politicians who simply refused to budge.
A demonstrator holds a flare during a Paris protest against Uber. Photograph: François Mori/AP
When faced with opposition, Uber sought to turn it to its advantage, seizing upon it to fuel the narrative its technology was disrupting antiquated transport systems, and urging governments to reform their laws.
As Uber launched across India, Kalanick’s top executive in Asia urged managers to focus on driving growth, even when “fires start to burn”. “Know this is a normal part of Uber’s business,” he said. “Embrace the chaos. It means you’re doing something meaningful.”
Kalanick appeared to put that ethos into practice in January 2016, when Uber’s attempts to upend markets in Europe led to angry protests in Belgium, Spain, Italy and France from taxi drivers who feared for their livelihoods.
Amid taxi strikes and riots in Paris, Kalanick ordered French executives to retaliate by encouraging Uber drivers to stage a counter-protest with mass civil disobedience.
Warned that doing so risked putting Uber drivers at risk of attacks from “extreme right thugs” who had infiltrated the taxi protests and were “spoiling for a fight”, Kalanick appeared to urge his team to press ahead regardless. “I think it’s worth it,” he said. “Violence guarantee[s] success. And these guys must be resisted, no? Agreed that right place and time must be thought out.”
The decision to send Uber drivers into potentially volatile protests, despite the risks, was consistent with what one senior former executive told the Guardian was a strategy of “weaponising” drivers, and exploiting violence against them to “keep the controversy burning”.
It was a playbook that, leaked emails suggest, was repeated in Italy, Belgium, Spain, Switzerland and the Netherlands.
When masked men, reported to be angry taxi drivers, turned on Uber drivers with knuckle-dusters and a hammer in Amsterdam in March 2015, Uber staffers sought to turn it to their advantage to win concessions from the Dutch government.
Driver victims were encouraged to file police reports, which were shared with De Telegraaf, the leading Dutch daily newspaper. They “will be published without our fingerprint on the front page tomorrow”, one manager wrote. “We keep the violence narrative going for a few days, before we offer the solution.”
Kalanick’s spokesperson questioned the authenticity of some documents. She said Kalanick “never suggested that Uber should take advantage of violence at the expense of driver safety” and any suggestion that he was involved in such activity would be “completely false”.
Uber’s spokesperson also acknowledged past mistakes in the company’s treatment of drivers but said no one, including Kalanick, wanted violence against Uber drivers. “There is much our former CEO said nearly a decade ago that we would certainly not condone today,” she said. “But one thing we do know and feel strongly about is that no one at Uber has ever been happy about violence against a driver.”
The ‘kill switch’
Uber drivers were undoubtedly the target of vicious assaults and sometimes murders by furious taxi drivers. And the cab-hailing app, in some countries, found itself battling entrenched and monopolised taxi fleets with cosy relationships with city authorities. Uber often characterised its opponents in the regulated taxi markets as operating a “cartel”.
However, privately, Uber executives and staffers appear to have been in little doubt about the often rogue nature of their own operation.
In internal emails, staff referred to Uber’s “other than legal status”, or other forms of active non-compliance with regulations, in countries including Turkey, South Africa, Spain, the Czech Republic, Sweden, France, Germany, and Russia.
One senior executive wrote in an email: “We are not legal in many countries, we should avoid making antagonistic statements.” Commenting on the tactics the company was prepared to deploy to “avoid enforcement”, another executive wrote: “We have officially become pirates.”
Nairi Hourdajian, Uber’s head of global communications, put it even more bluntly in a message to a colleague in 2014, amid efforts to shut the company down in Thailand and India: “Sometimes we have problems because, well, we’re just fucking illegal.” Contacted by the Guardian, Hourdajian declined to comment.
Kalanick’s spokesperson accused reporters of “pressing its false agenda” that he had “directed illegal or improper conduct”.
Uber’s spokesperson said that, when it started, “ridesharing regulations did not exist anywhere in the world” and transport laws were outdated for a smartphone era.
Across the world, police, transport officials and regulatory agencies sought to clamp down on Uber. In some cities, officials downloaded the app and hailed rides so they could crack down on unlicensed taxi journeys, finding Uber drivers and impounding their cars. Uber offices in dozens of countries were repeatedly raided by authorities.
Against this backdrop, Uber developed sophisticated methods to thwart law enforcement. One was known internally at Uber as a “kill switch”. When an Uber office was raided, executives at the company frantically sent out instructions to IT staff to cut off access to the company’s main data systems, preventing authorities from gathering evidence.
The leaked files suggest the technique, signed off by Uber’s lawyers, was deployed at least 12 times during raids in France, the Netherlands, Belgium, India, Hungary and Romania.
Travis Kalanick speaking to students in Mumbai in 2016. Photograph: Danish Siddiqui/Reuters
Kalanick’s spokesperson said such “kill switch” protocols were common business practice and not designed to obstruct justice. She said the protocols, which did not delete data, were vetted and approved by Uber’s legal department, and the former Uber CEO was never charged in relation to obstruction of justice or a relate offence.
Uber’s spokesperson said its kill switch software “should never have been used to thwart legitimate regulatory action” and it had stopped using the system in 2017, when Khosrowshahi replaced Kalanick as CEO.
Another executive the leaked files suggest was involved in kill switch protocols was Pierre-Dimitri Gore-Coty, who ran Uber’s operations in western Europe. He now runs Uber Eats, and sits on the company’s 11-strong executive team.
Gore-Coty said in a statement he regretted “some of the tactics used to get regulatory reform for ridesharing in the early days”. Looking back, he said: “I was young and inexperienced and too often took direction from superiors with questionable ethics.”
Uber broke laws, duped police and secretly lobbied governments, leak reveals | Uber | The Guardian
|RecommendKeepReplyMark as Last Read|